Case Law Review: Five Must-read Workplace Investigation Cases

In my last blog, I wrote about the importance of investigators becoming case law experts; that is, reading cases to understand what courts and tribunals consider to be investigation flaws. Admittedly, it can be difficult to keep up with case law and find time to review cases in depth; there are never enough hours in the day.

In this blog, I am hoping to save you some time by sharing five Canadian workplace investigation cases that I have found helpful in my practice. I rely on these when I provide guidance to others about best practices or when I'm asked to assess the strength of an investigation. These cases have helped me to anticipate what a legal decision maker might find problematic, so that potential fairness issues can be addressed before an investigation is finalized.

I start with the case of Murchie v. JB's Mongolian Grill ¹, which is a 2006 case of the Ontario Human Rights Tribunal. The Tribunal commented on many different investigation flaws, which is why I find it helpful. The relevant points are these:

• Murchie worked at a restaurant. She complained to senior staff that, while she was in the kitchen, a cook placed his finger on her breast and deliberately "flicked" her nipple. Ms. Murchie complained and an internal investigation by management followed. Management eventually advised Ms. Murchie that they had concluded that the touching was accidental. Ms. Murchie disagreed and claimed constructive dismissal; she left her employment.
• Murchie successfully brought an application to the Tribunal which found, in part, that Ms. Murchie had been subjected to discrimination flowing from an unreasonable investigation.
• The Tribunal's reasons to support its conclusion about the unreasonableness of the investigation give us three important takeaways. First, an investigator must be trained in the subject matter of the investigation. In this case, the investigators were not trained in human rights. Second, an investigator must be free of conflicts of interest; each investigator in this case had a friendship with the complainant. Third, investigators must conduct neutral investigations, even when parties strongly assert their rights during the investigation. In the case at hand, the Tribunal remarked that it was clear that management was "losing patience" with Ms. Murchie as she was trying to enforce her rights under the Ontario Human Rights Code.

Moving on to the next case. Chapell v. Canadian Pacific Railway Company ² is a 2010 decision of the Court of Queen's Bench of Alberta. I find this case interesting because it is one of the few decisions where the workplace investigation at issue does not relate to discrimination or harassment. The salient points are as follows:

• Chapell had spent his entire career working for the employer. The employer identified irregularities with expenses he had submitted while working on a lengthy project (duplicative expenses). The matter was assigned to an individual in Human Resources, who then appeared to investigate. Mr. Chapell's employment was subsequently terminated for just cause, and he then brought an action for wrongful dismissal.
• The Court agreed that Mr. Chapell was wrongfully dismissed. In a rather scathing decision, the Court noted that the investigation was not a fact-finding mission, but rather, an exercise in "case building" against Mr. Chapell.
• From an investigation standpoint, the main takeaway relates to the need to allow respondents to make a "full and fair defence." This can be done by giving advance notice to the respondent of the allegations that they must meet, something which the investigator in this case failed to do. Mr. Chapell understood, before meeting with the investigator, that there were 9 expenses under investigation; it turns out, however, that there were 37. The investigator must also be mindful to consider any explanation provided by a respondent that could serve as a valid response to the allegations. In Mr. Chapell's case, the investigator was dismissive of evidence that he provided to explain the irregularities (large project, heavy workload, little administrative help, etc.)

The next case, Elgert v. Home Hardware Stores Limited ³, is also from Alberta. It is a 2011 decision of the Court of Appeal of Alberta. I find this case useful because, like Murchie, it reviews several investigatory flaws. The relevant points are as follows:

• Elgert had worked for his employer for nearly 17 years when his employment was terminated without notice. Two women had alleged that Mr. Elgert had, separately, "belly bumped" them, and made additional bodily contact in the process. Mr. Elgert sued his employer for wrongful dismissal. He was successful at trial, which was decided by a jury, and was awarded significant damages. The employer appealed; it was successful, in part.
• For our purposes, what is important is that, in finding that the issue of aggravated and punitive damages had properly been left with the jury, the Court of Appeal stated that there was "sufficient evidence to permit a jury to conclude that the manner of dismissal was unfair, in bad faith, misleading, or unduly insensitive" [para. 87]. For this conclusion, the Court of Appeal relied, in part, on flaws with the investigation.
• The main takeaway is the list of flaws noted by the Court of Appeal. I have summarized some of these here:
• Conflict of interest: The investigator was friends with the complainant's father (who also worked for the employer), and the father had been involved in the matter initially.
• Lack of training: The investigator had no training or experience in investigations.
• Lack of open mind: The investigator was accusatory in the initial meeting with Mr. Elgert. When Mr. Elgert asked what he was alleged to have done, he was told that he knew. After that meeting, the investigator told Mr. Elgert's son (who also worked for the employer), that he would not have suspended Mr. Elgert if he was not "100 percent positive."
• Delayed particulars: Elgert was not provided with the particulars before he was interviewed or even during the interview – he received particulars 10 days later.
• Lack of thoroughness: Motive or fabrication was not considered, even though it was a live issue.

I now turn to Shoan v. Attorney General of Canada ⁴, which is a 2016 decision of the Federal Court of Canada about the need for investigators to have an open mind. The following are the relevant points:

• Shoan was a commissioner for a Canadian regulator. A senior employee alleged Mr. Shoan had harassed her, through a series of emails. The complaint was referred to an external investigator, who found that the complaint had merit. This outcome was ultimately accepted by the regulator and corrective measures were put in place. Mr. Shoan asked for a judicial review of this decision.
• One of the arguments Mr. Shoan made was that the investigator was biased. In simplified terms, on this issue, the Court considered whether the investigator had failed to keep an open mind, such that the matter under investigation had been pre-determined. It found the investigator did not have the requisite open mind.
• The important take away for investigators is how the Court arrived at that conclusion, which was by examining the conduct of the investigator and what was in the investigation report. To me, this means that investigators must take care not only to keep an open mind, but also, to ensure that they act and write in a way that suggests that they had not pre-determined the matter. In the case at hand, the Court considered, for example, that the investigator had exceeded the investigation mandate (the allegations were about harassing emails, but the investigation veered into whether Mr. Shoan had created a toxic work environment in the workplace).

I end with the case of Marentette v. Canada (Attorney General) ⁵, which is a more recent case of the Federal Court. There was a lot of chatter surrounding this case in investigation circles when it was released in 2024. For us at Rubin Thomlinson, it confirmed a procedural step that we already believed was integral to the investigation process: allowing both parties to rebut unfavourable evidence before relying on it to make findings. The relevant details of the case are these:

• Marentette worked for the Canadian Border Services Agency. He made a complaint of workplace harassment and violence against six supervisors. The matter was investigated and the final report, which Mr. Marentette received, concluded that none of the alleged incidents constituted workplace harassment or violence. Mr. Marentette sought judicial review and an order setting aside the investigation report, which had been adopted by his employer.
• Marentette's application for judicial review was successful; the Court found that the investigation was procedurally unfair. In so finding, it remarked that the case law supported that the elevated duty of procedural fairness in harassment investigations applies equally to complainants and respondents.
• The takeaway for investigators in this case derives from the reason why the Court found the investigation procedurally unfair; namely, that the employer did not follow its own investigation processes, such that Mr. Marentette was not given the investigator's preliminary report. As a result, he was also not afforded an opportunity to rebut evidence that was unfavourable to him. This is a good reminder for employers and investigators to follow internal investigation procedures, and also, to give parties the opportunity to respond to unfavourable evidence.

Footnotes

1. 2006 HRTO 33 (CanLII).

2. 2010 ABQB 441 (CanLII).

3. 2011 ABCA 112 (CanLII).

4. 2016 FC 1003 (CanLII).

5. 2024 FC 676 (CanLII).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.